The FBI arrested seven people on Tuesday and is searching for seven more in conjunction with what the agency says is a money-laundering scheme to funnel Mexican drug cartel profits through American horse racing.

Among those arrested is 45-year-old José Treviño Morales, owner of a horse called Mr. Piloto that won a $1 million purse at Ruidoso Downs Race Track & Casino in September 2010. The FBI alleges that the money to buy Mr. Piloto, hundreds of other horses and a ranch in Oklahoma came from Morales' younger brother, Miguel Ángel Treviño Morales, one of the world's most-wanted drug traffickers and second in command of the Zetas cartel in Mexico.

According to an in-depth investigation by the New York Times, the brothers' horse-breeding operation, Tremor Enterprises, has won $2.5 million in some of the horse-racing industry's biggest competitions over the past three years. Meanwhile, they were funneling about $1 million per month into the U.S. to buy additional horses.

"This case is a prime example of the ability of Mexican drug cartels to establish footholds in legitimate U.S. industries and highlights the serious threat money laundering causes to our financial system," Richard Weber, chief of the IRS' criminal investigation unit, said in a statement on Tuesday. "This attack on one of the Zeta's most profitable money laundering schemes is an essential front in the war on drugs and will financially disrupt and help dismantle this violent international criminal organization."

The Times has been investigating the Zetas connection for more than six months and "agreed to hold this story until Tuesday morning's arrests." The raids and arrests employed helicopters and hundreds of FBI agents, who searched both the Oklahoma ranch and Tremor's stables at Ruidoso. Other arrests occurred in Los Angeles and Austin, Texas.

Also arrested on Tuesday was José's wife Zulema, 38. All seven people arrested have been charged with one count each of "conspiracy to launder monetary instruments."

The location of Miguel Morales and another brother, Oscar Omar Trevino Morales, who was also charged, is not known. The FBI says they are likely in Mexico.

The El Paso Times spoke to several people at Ruidoso who said they were not surprised by the charges and arrests. "It was just a matter of time," said one jockey, speaking anonymously. "Nobody really knew who they were and they didn't have much connection to the area back in 2010. People just knew they spent a lot of money in the sport."

According to the Times' investigation, the Zetas are the top security threat to Mexico's democracy. Their criminal history goes back to at least 1995 and is riddled with bold drug trafficking schemes and violence. Just last month, Mexican authorities linked Miguel Morales with the deaths of 49 people. Their decapitated bodies, also missing hands and feet, were found in garbage bags in northern Mexico.